The friendly relations between the Principality of Liechtenstein and the Federal Republic of Germany should in no way be damaged

Government statement

In the first case of its kind, the tiny principality aims to regain assets which it says Germany handed to Czechoslovakia at the end of the war.

It claims this was a violation of its national sovereignty.

The case is expected to last for several years.

Millions of dollars

Liechtenstein's Foreign Minister, Ernst Walch, summoned the German ambassador, Reinhard Hilger, to the capital Vaduz from his embassy in Bern, in neighbouring Switzerland, to give him the news, the government said in a statement on Thursday.

The principality is angry with Germany about money-laundering claims

"The Liechtenstein Government stresses that the friendly relations between the Principality of Liechtenstein and the Federal Republic of Germany should in no way be damaged by the filing of the case," the statement said.

Liechtenstein has long complained about the seizure of hundreds of millions of dollars in property from its royal family after World War II.

Ruling Prince Hans Adam II was quoted in 1998 as saying his family had lost castles, art works and other assets worth 1bn francs (then $675m).

Liechtenstein says these assets were seized by Czechoslovakia in its post-war settlement agreement with Germany and that the Czechs did not pay it any compensation.

Money laundering

Liechtenstein, sandwiched between Austria and Switzerland, was neutral during the war.

Liechtenstein's attempts to negotiate with the Czechs were fruitless as Prague does not recognise its sovereignty.

Another attempt to resolve the problem in a case at Germany's constitutional court was also unsuccessful.

Correspondents say that the Liechtenstein, with a population of 32,000, has been furious with Germany since 1999, when a leaked intelligence report alleged that the picture-postcard principality was an international money-laundering centre.

It was reported that German agents eavesdropped on businesses in Liechtenstein through one of their monitoring centres in the Black Forest.